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Adjusted earnings for the quarter were $127 million or $1.75 per share compared with $43.2 million or 60 cents per share in the year-earlier quarter. The bottom line comfortably beat the Zacks Consensus Estimate of 18 cents. The year-over-year increase in adjusted earnings was aided by a healthy rise in revenues and a moderate decline in operating expenses. The company reported adjusted earnings of $2.42 per share for full-year 2017.

Earnings Highlights

GAAP earnings for the reported quarter were $51.2 million or 77 cents per share against GAAP loss of $1.2 million or loss of 2 cents per share in the year-ago quarter. The surge was aided by restructuring initiatives by the company in the prior years. GAAP loss for the year was $1.28 per share compared with loss of 95 cents in the prior year.

With successful implementation of operational plans, the company reported healthy rise in revenues for the reported quarter. Total revenues came in at $746.6 million compared with $721.7 million in the year-ago quarter. It surpassed the Zacks Consensus Estimate of $698 million.

The Services segment recorded revenues of $592.6 million, down from $596.5 million in the prior-year quarter. Technology segment’s revenues increased to $154 million from $125.2 million in the year-earlier quarter. This segment showed strong revenue increase driven by higher demand in its product line, particularly for ClearPath Forward products.

Non-GAAP operating profit for the reported quarter was $118.2 million compared with $69.9 million in the prior-year quarter. Also, non-GAAP operating profit margin was 15.8% for the quarter, up 610 basis points.

Balance Sheet and Cash Flow

As of Dec 31, 2017, Unisys had $733.9 million in cash and cash equivalents compared with $370.6 million in the prior-year period. Long-term debt was $633.9 million compared with $194 million a year ago. For 2017, the company generated $166.4 million of cash from operating activities compared with $218.2 million in 2016. Adjusted free cash flow for the year was $198.6 million compared with $277.6 million in the prior year.

Moving Forward

For 2018, the company expects revenues in the range of $2.7-$2.83 billion, with a slight decrease in revenues and margins in the Technology segment. Non-GAAP operating margin in the range of 7.8-8.8% and adjusted EBITDA margin in the range of 13.7-14.9% are expected.

CDK Global has an expected long-term earnings growth rate of 15%. It exceeded estimates in each of the trailing four quarters with an average beat of 11.3%.

CoStar has an expected long-term earnings growth rate of 16.8%.

Fair Isaac has an expected long-term earnings growth rate of 10%.

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